01779cam a22002297 4500001000600000003000500006005001700011008004100028100002400069245009900093260006600192490004100258500001900299520087100318530006101189538007201250538003601322710004201358830007601400856003701476856003601513w3610NBER20150303145749.0150303s1991 mau||||fs|||| 000 0 eng d1 aFeenstra, Robert C.10aNew Goods and Index Numbersh[electronic resource]:bU.S. Import Prices /cRobert C. Feenstra. aCambridge, Mass.bNational Bureau of Economic Researchc1991.1 aNBER working paper seriesvno. w3610 aFebruary 1991.3 aResearchers constructing index number frequently face the problem of new (or disappearing) goods, for which the price and quantity are not available in some periods. In theory, the correct way to handle a new good is to treat its price before it appears as equal to the reservation price (i.e., where demand is zero); in practice, this method can be difficult to implement. However, if the underlying aggregator function is CES then the reservation price is infinity, and we show that the corresponding price index takes on a very sensible form. We apply this formula to measure the price index for six disaggregate U.S. imports, which have been supplied from many new countries over the past several decades. We find that by incorporating the new supplying countries, the price index for developing countries is significantly lower than would otherwise be measured. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w3610.4 uhttp://www.nber.org/papers/w361041uhttp://dx.doi.org/10.3386/w3610